Industry 4.0 technologies implementation patterns in manufacturing companies

Contents lists available at ScienceDirect
International Journal of Production Economics
journal homepage: www.elsevier.com/locate/ijpe
Industry 4.0 technologies: Implementation patterns in manufacturing
companies
Alejandro Germán Franka,∗
, Lucas Santos Dalenogareb
, Néstor Fabián Ayalac
a
Organizational Engineering Group (Núcleo de Engenharia Organizacional – NEO), Department of Industrial Engineering, Universidade Federal do Rio Grande do Sul,
Brazil
b
G-SCOP Laboratory, Grenoble Institute of Technology (Grenoble INP), France
c
Organizational Engineering Group (Núcleo de Engenharia Organizacional – NEO), Department of Service Engineering, Universidade Federal do Rio Grande do Sul, Brazil
A R T I C L E I N F O
Keywords:
Industry 4.0
Smart Manufacturing
digital transformation
manufacturing companies
A B S T R A C T
Industry 4.0 has been considered a new industrial stage in which several emerging technologies are converging
to provide digital solutions. However, there is a lack of understanding of how companies implement these
technologies. Thus, we aim to understand the adoption patterns of Industry 4.0 technologies in manufacturing
firms. We propose a conceptual framework for these technologies, which we divided into front-end and base
technologies. Front-end technologies consider four dimensions: Smart Manufacturing, Smart Products, Smart
Supply Chain and Smart Working, while base technologies consider four elements: internet of things, cloud
services, big data and analytics. We performed a survey in 92 manufacturing companies to study the im-
plementation of these technologies. Our findings show that Industry 4.0 is related to a systemic adoption of the
front-end technologies, in which Smart Manufacturing plays a central role. Our results also show that the im-
plementation of the base technologies is challenging companies, since big data and analytics are still low im-
plemented in the sample studied. We propose a structure of Industry 4.0 technology layers and we show levels of
adoption of these technologies and their implication for manufacturing companies.
1. Introduction
The fourth industrial revolution – also named as Industry 4.0 – is
one of the most trending topics in both professional and academic fields
(Chiarello et al., 2018; Liao et al., 2017). This concept has Smart
Manufacturing as its central element (Kagermann et al., 2013). It also
considers the integration of the factory with the entire product lifecycle
and supply chain activities (Wang et al., 2016b; Dalenogare et al.,
2018), changing even the way people work (Stock et al., 2018). In-
dustry 4.0 relies on the adoption of digital technologies to gather data
in real time and to analyze it, providing useful information to the
manufacturing system (Lee et al., 2015; Wang et al., 2016a). The advent
of Internet of Things (IoT), cloud services, big data and analytics, made
this possible, creating the cyber-physical system concept of Industry 4.0
(Wang et al., 2015; Lu, 2017).
The Industry 4.0 concept has a very complex technology archi-
tecture of the manufacturing systems (Lee et al., 2015), which is one of
the main concerns in this new industrial stage. Therefore, the effective
implementation of Industry 4.0 technologies is still a subject of research
(Lee et al., 2015; Babiceanu and Seker, 2016; Dalenogare et al., 2018).
Some prior works have proposed maturity models for the im-
plementation of these technologies (e.g. Schuh et al., 2017; Lee et al.,
2015; Lu and Weng, 2018; Mittal et al., 2018), while other works have
studied the impact of these technologies on industrial performance
(Dalenogare et al., 2018). However, there is a lack of studies providing
empirical evidence about the way these technologies are adopted in
manufacturing companies, leading to an important question: what are
the current Industry 4.0 technologies adoption patterns in manufacturing
companies?
In order to answer this question, we present an exploratory quan-
titative analysis of 92 manufacturing companies from the machinery
and equipment sector. We aim to understand if manufacturing com-
panies can be organized based on adoption patterns of Industry 4.0
technologies and if these patterns allow to define specific configura-
tions of Industry 4.0 technologies. Such analysis helps us to understand
what is needed for an effective implementation of Industry 4.0 tech-
nologies in manufacturing companies. We first propose a conceptual
framework of Industry 4.0 technologies, into two main layers: front-end
https://doi.org/10.1016/j.ijpe.2019.01.004
Received 22 September 2018; Received in revised form 3 January 2019; Accepted 5 January 2019
∗
Corresponding author. Universidade Federal do Rio Grande do Sul, Centro, Av. Osvaldo Aranha 99 - Sala LOPP 508 - 5º andar, Escola de Engenharia, CEP
90035190, Porto Alegre, RS, Brazil.
E-mail address: frank@producao.ufrgs.br (A.G. Frank).
International Journal of Production Economics 210 (2019) 15–26
Available online 09 January 2019
0925-5273/ © 2019 Elsevier B.V. All rights reserved.
T

and base technologies. The first layer (front-end technologies) com-
prises four main dimensions of Industry 4.0: Smart Manufacturing,
Smart Products, Smart Supply Chain and Smart Working, each of them
representing a specific subset of technologies. The second layer (base
technologies) considers technologies that provide connectivity and in-
telligence to the front-end technologies (e.g. IoT and analytics). Then,
we apply a cluster analysis to define patterns of adoption of these two
layers of technologies in the surveyed companies and to understand
relationships among these technologies. As a key-finding, we propose a
structure of Industry 4.0 technology layers and we show levels of
adoption of these technologies and their implication for the im-
plementation of the Industry 4.0 concept. These findings are summar-
ized in a final framework representing a maturity pattern of the
Industry 4.0 implementation in the sample studied.
2. Defining the Industry 4.0 concept
Industry 4.0 was coined in 2011 by a German initiative of the fed-
eral government with universities and private companies. It was a
strategic program to develop advanced production systems with the
aim of increasing productivity and efficiency of the national industry
(Kagermann et al., 2013). This concept represents a new industrial
stage of the manufacturing systems by integrating a set of emerging and
convergent technologies that add value to the whole product lifecycle
(Dalenogare et al., 2018; Wang et al., 2016b). This new industrial stage
demands a socio-technical evolution of the human role in production
systems, in which all working activities of the value chain will be
performed with smart approaches (Smart Working) (Stock et al., 2018;
Longo et al., 2017) and grounded in information and communication
technologies (ICTs) (Raguseo et al., 2016).
Industry 4.0 is rooted in the advanced manufacturing or also called
Smart Manufacturing concept, i.e. an adaptable system where flexible
lines adjust automatically production processes for multiple types of
products and changing conditions (Wang et al., 2016a; Schuh et al.,
2017). This allows to increase quality, productivity and flexibility and
can help to achieve customized products at a large scale and in a sus-
tainable way with better resource consumption (Dalenogare et al.,
2018; de Sousa Jabbour et al., 2018).
Industry 4.0 also considers the exchange of information and in-
tegration of the supply chain (called Smart Supply Chain), synchronizing
production with suppliers to reduce delivery times and information
distortions that produce bullwhip effects (Ivanov et al., 2016). This
integration also enables companies to combine resources in collabora-
tive manufacturing (Chien and Kuo, 2013; Lin et al., 2012), allowing
them to focus on their core competences and share capabilities for
product innovation in industry platforms, a joint effort to develop
products and complementary assets and services, with more value-
added (Gawer and Cusumano, 2014; Kortmann and Piller, 2016; Chen
and Tsai, 2017).
The technologies embedded in the final products (Smart Products)
are also part of the broader Industry 4.0 concept (Dalenogare et al.,
2018). Smart Products can provide data feedback for new product de-
velopment (Tao et al., 2018b) as well as they can provide new services
and solutions to the customer (Porter and Heppelmann, 2015). Thus,
some scholars consider the Smart Products as the second main objective
of Industry 4.0, since they allow new business models such as the
product-service systems, which create new opportunities for manu-
facturers and service providers (Zhong et al., 2017; Ayala et al., 2019).
3. A conceptual framework for Industry 4.0 technologies
Industry 4.0 technologies can be separated, at least, into two dif-
ferent layers according to their main objective, as proposed in our
conceptual framework of Fig. 1. In the center of the framework we
place what we call as ‘Front-end technologies’ of Industry 4.0, which
considers the transformation of the manufacturing activities based on
emerging technologies (Smart Manufacturing) and the way product are
offered (Smart Products) (Dalenogare et al., 2018). It also considers the
way raw materials and product are delivered (Smart Supply Chain)
(Angeles, 2009) and the new ways workers perform their activities
based on the support of emerging technologies (Smart Working) (Stock
et al., 2018; Longo et al., 2017). We call ‘front-end technologies’ to this
technology layer because the four ‘smart’ dimensions are concerned
with operational and market needs. Therefore, they have an end-ap-
plication purpose for the companies' value chain, as shown in the
schematic arrow represented in Fig. 1. It is worth noticing that the
central dimension of the front-end technology layer is the Smart Man-
ufacturing, while the other dimensions are interconnected to this one.
The front-end layer relies on another layer represented in Fig. 1: the
‘base technologies’ which comprises technologies that provide con-
nectivity and intelligence for front-end technologies. This last layer is
the one which enables the Industry 4.0 concept, differentiating this
concept from previous industrial stages. This is because base-technol-
ogies allow front-end technologies to be connected in a complete in-
tegrated manufacturing system (Tao et al., 2018a; Thoben et al., 2017;
Wang et al., 2016a). In the following subsections, we define each layer
proposed in our framework of Fig. 1. We aim to understand how these
technologies are used in manufacturing firms and if they follow im-
plementation patterns.
3.1. Industry 4.0 front-end technologies
3.1.1. Smart Manufacturing and Smart Products
In the core of the Industry 4.0 concept, Smart Manufacturing tech-
nologies work as the central pillar of the internal operations activities
(Ahuett-Garza and Kurfess, 2018), while Smart Product consider the
external value-added of the products, when customer information and
data are integrated with the production system (Dalenogare et al.,
2018). These two dimensions consider technologies that have direct
impact on manufactured products. Smart Manufacturing considers
technologies for the product processing (production system), while
Smart Products considers technologies related to the product offering.
Therefore, we assume that Smart Manufacturing is the beginning and
first purpose of Industry 4.0, while Smart Product is its extension. This
vision follows the chronological recent evolution of the Industry 4.0
concept, which has its roots firstly in the advanced manufacturing
systems and its connections with other processes of the company (Yin
et al., 2018; Dalenogare et al., 2018).
Regarding the Smart Manufacturing dimension, we subdivided the
related technologies into six main purposes: (i) vertical integration, (ii)
virtualization, (iii) automation, (iv) traceability, (v) flexibility and (vi)
energy management, as summarized in Table 1.
Factory's vertical integration comprises advanced ICT systems that
integrate all hierarchical levels of the company – from shop floor to
middle and top-management levels – helping decision-making actions
to be less dependent of human intervention (Schuh et al., 2017). To
reach vertical integration, the first step at shop floor is the digitalization
of all physical objects and parameters with sensors, actuators and
Programmable Logic Controllers (PLC) (Jeschke et al., 2017). The data
is then gathered with Supervisory Control and Data Acquisition
Fig. 1. Theoretical framework of Industry 4.0 technologies.
A.G. Frank et al. International Journal of Production Economics 210 (2019) 15–26
16

(SCADA), for production control and diagnosis at the shop floor. At the
managerial information layers, Manufacturing Execution Systems
(MES) obtain data from SCADA, providing production status to the
Enterprise Resource Planning (ERP) system. When all systems are
properly integrated, the information of production orders also flows in
the inverse way (downstream), from ERP to MES and then to SCADA,
helping to deploy the enterprise resources into manufacturing orders
(Tao et al., 2018c; Jeschke et al., 2017). Therefore, vertical integration
provides more transparency and control of the production process and
helps to improve the shop floor decision-making process. To enhance
adaptability for different types of products, Smart Manufacturing
comprises networked machines at shop floor, through machine-to-ma-
chine communication (M2M) (Kagermann et al., 2013). M2M consist in
a communication system with interoperability, which makes machines
capable to understand each other, facilitating their adaptation in
manufacture lines (Gilchrist, 2016). This capability is supported by
virtual commissioning, which emulates the different PLC-codes of ma-
chines and validates virtually setup procedures, avoiding extended
downtime due to the long setup of equipment (Mortensen and Madsen,
2018). This simulation is more advanced with digital manufacturing,
which besides PLC-codes also considers data from all virtualized objects
of the shop floor and then simulates operations' processes, considering
several parameters that can affect production (Jeschke et al., 2017).
Smart Manufacturing also promotes an enhanced automation
(Kagermann et al., 2013). Robots can perform tasks with more precision
than in the past, increasing productivity while being much less prone to
fatigue (Thoben et al., 2017). In our work, we differentiate robots and
automation from collaborative robots. The former is designed to auto-
matize operational processes and, therefore, we included it as a part of
the Smart Manufacturing dimension, while the latter is designed to
work with humans, supporting tasks that help to enhance human's
flexibility and productivity (Gilchrist, 2016). Therefore, were included
collaborative robots as a technology of the Smart Working dimension,
as we explain after.
Moreover, artificial intelligence gives support for Smart
Manufacturing in many ways. In machines, advanced analytical tools
can analyze data gathered from sensors to monitor and forecast ma-
chinery failures, overloads or any other problems. This enables pre-
dictive maintenance which helps to avoid downtimes due to unexpected
failures during the production process (Tao et al., 2018c). Machines
with artificial intelligence can also automatically identify product
nonconformities in earlier stages of the production process, increasing
quality control and reducing production costs (Tao et al., 2018c).
Furthermore, artificial intelligence also complements systems like ERP,
predicting long-term production demands and transforming them into
daily production orders, considering last-minute orders and operations’
restrictions (Gilchrist, 2016).
For internal traceability, sensors are applied in raw materials and
finished products in the factory's warehouse. This optimized inventory
control gives support for recall actions, through identification of spe-
cific components in batches of finished products. Internal traceability
can also give support to adaptable systems with flexible lines (Angeles,
2009; Wang et al., 2016b), in which machines read products require-
ments in the sensors embedded in them, and perform the necessary
actions to manufacture them. Flexible lines can also comprise modular
machines that are easily plugged into a manufacturing line with
minimum setup. This enables the production of different types of pro-
ducts at small batches, with minimum loss of productivity (Wang et al.,
2016b; Balogun and Popplewell, 1999). In addition, to customize pro-
ducts, additive manufacturing is a promising technology of the Industry
4.0 concept. Additive manufacturing uses 3D printing of digital models
that can be altered for customization, using the same resources to
manufacture different goods. Additive manufacturing also promotes a
sustainable production, as it only requires one process that generates
less waste than traditional manufacturing. However, for large-scale
productions, the use of additive manufacturing is still limited due to its
low throughput speed (Weller et al., 2015; D'Aveni, 2015). Lastly, to
enhance factory's efficiency, Smart Manufacturing also comprises en-
ergy management (monitoring and improving energy efficiency)
(Kagermann et al., 2013). Efficiency monitoring relies on data collec-
tion of energy consumption in electrical power grids, while its im-
provement is achieved through intelligent systems for energy man-
agement that schedule intensive stages of production in times with
favorable electricity rates (Gilchrist, 2016; Jeschke et al., 2017).
Manufacturing companies can focus on different needs they may
have when they prioritize the implementation of the aforementioned
Smart Manufacturing technologies. However, recent findings of the
literature have shown that the industry varies in the benefits expected
by those technologies for industrial performance and companies should
think systemically the implementation of such technologies to achieve a
higher maturity level of Industry 4.0 (Dalenogare et al., 2018). This
suggests that the Smart Manufacturing technologies can be interrelated
and create synergy for the Industry 4.0 purposes. This synergistic in-
tegration of the Smart Manufacturing technologies supported by IoT
results in the so called cyber-physical systems (CPS) – i.e. the integra-
tion of the physical objects of the factory with the virtual dimension of
the factory, including integrated data, artificial intelligence and simu-
lation – (Wang et al., 2016a; Schuh et al., 2017; Tao et al., 2018c),
which is one of the essential concepts of Industry 4.0. Therefore, we
assume the following hypothesis regarding the adoption of Smart
Table 1
Smart Manufacturing technologies.
Categories Technologies for Smart Manufacturing Reference
Vertical integration Sensors, actuators and Programmable Logic Controllers (PLC) Jeschke et al. (2017); Lee et al. (2015)
Supervisory Control and Data Acquisition (SCADA) Jeschke et al. (2017)
Manufacturing Execution System (MES) Telukdarie et al. (2018); Jeschke et al. (2017)
Enterprise Resource Planning (ERP) Jeschke et al. (2017)
Machine-to-machine communication (M2M) Gilchrist (2016)
Virtualization Virtual commissioning Mortensen and Madsen (2018); Tao et al. (2018c)
Simulation of processes (e.g. digital manufacturing) Jeschke et al. (2017)
Artificial Intelligence for predictive maintenance Tao et al. (2018c)
Artificial Intelligence for planning of production Gilchrist (2016)
Automation Machine-to-machine communication (M2M) Gilchrist (2016)
Robots (e.g. Industrial Robots, Autonomous Guided Vehicles, or similar) Gilchrist (2016)
Automatic nonconformities identification in production Gilchrist (2016); Jeschke et al. (2017)
Traceability Identification and traceability of raw materials Angeles (2009)
Identification and traceability of final products
Flexibility Additive manufacturing Weller et al. (2015); D'Aveni (2015)
Flexible and autonomous lines Balogun and Popplewell (1999); Wang et al. (2016a)
Energy management Energy efficiency monitoring system Gilchrist (2016); Kagermann et al. (2013)
Energy efficiency improving system Jeschke et al. (2017); Kagermann et al. (2013)
17

Manufacturing technologies:
H1. Manufacturing companies that aim a higher maturity level of
Industry 4.0 will implement systemically most of the Smart
Manufacturing technologies, since these technologies are interrelated.
On the other hand, the front-end technologies for Smart Products
comprise smart components that enable digital capabilities and services
with products’ offering, as shown in Table 2. In this case, we consider
technological capabilities needed for different levels of Smart Product,
as proposed in the seminal work of Porter and Heppelmann (2014).
Embedded sensors allow connectivity of products in a network with
other objects and systems. Sensors can provide monitoring capability in
physical products, allowing customers to know the product condition
and usage parameters. Products with embedded software connected to
cloud services can be controlled through digital remote interfaces. With
analytical algorithms, products can have optimization functions, en-
hancing products’ performance based on predictive diagnoses that in-
forms necessary corrections. Using artificial intelligence, products can
autonomously optimize themselves. These capabilities extend products
functions for customers, bringing new opportunities for manufacturers.
Product monitoring also provides useful information for manufacturers,
who can gather this data and identify patterns of product usage for
market segmentation and new product development. This also enables
digital product-service-systems (PSS), in which manufacturers can offer
additional services with the product and even offer the product as a
service (Zhong et al., 2017; Ayala et al., 2017). Although some com-
panies can be focused on the external aspect of the digital technologies,
i.e. Smart Products for the end customer, the Industry 4.0 concept as-
sumes that both, internal Smart Manufacturing and external Smart
Products should be connected and integrated (Tao et al., 2018a;
Kagermann et al., 2013; Porter and Heppelmann, 2015). Such an ap-
proach was previously studied by Kamp et al. (2017) and Rymaszewska
et al. (2017) who studied the connections of the digital products and
services with internal processes. Therefore, we propose the following
hypothesis:
H2. Manufacturing companies that are strongly engaged in Smart
Product technologies will also show high maturity in Smart
Manufacturing technologies, being both implementations related.
3.1.2. Smart Supply Chain and Smart Working
Two other complementary group of front-end technologies of
Industry 4.0 are Smart Supply Chain and Smart Working. We con-
sidered them separately from Smart Manufacturing and Smart Products
because these two latter have the purpose of adding value to manu-
facturing and final products while Smart Supply Chain and Smart
Working dimensions have the purpose of providing efficiency to the
complementary operational activities. Outside the factory, Smart Supply
Chain includes technologies to support the horizontal integration of the
factory with external suppliers to improve the raw material and final
product delivery in the supply chain, which impact on operational costs
and delivery time (Marodin et al., 2016, 2017a,b). On the other hand,
inside the factory, Smart Working considers technologies to support
workers tasks, enabling them to be more productive and flexible to
attend the manufacturing system requirements (Stock et al., 2018).
Both Smart Supply Chain and Smart Working are considered as front-
end since they have also a direct contribution to the operational per-
formance of the company. Next, we explain in detail the specific
technologies of these two dimensions, which are presented in Table 3.
First, the horizontal integration, supported by the Smart Supply
Chain technologies, involves exchanging real-time information about
production orders with suppliers and distribution centers (Pfohl et al.,
2017). While Smart Manufacturing includes intra-logistics processes
with technologies for internal traceability of materials and autonomous
guided vehicles (Tao et al., 2018a; Zhou et al., 2017), other technolo-
gies are needed to connect factories to external processes (Pfohl et al.,
2017). Digital platforms meet this requirement, as they provide easy
on-demand access to information displayed in a cloud, integrating
suppliers and manufacturers (Pfohl et al., 2017; Angeles, 2009). The
tracking of goods can be remotely monitored, maintaining warehousing
at optimized levels due to real-time communication with suppliers. In
addition, when digital platforms with analytical capabilities are con-
nected to meteorological systems, delivery delays can be avoided. Di-
gital platforms can also reach customers by tracking product delivery
and attending specific customer demands (Pfohl et al., 2017). Digital
platforms can also integrate different factories of the company by
sharing real-time information of the operations activities among them
(Simchi-Levi et al., 2004).
On the other hand, Smart Working technologies aim to provide
better conditions to the workers in order to enhance their productivity
(Kagermann et al., 2013) and to provide them remote access to the shop
floor information (Wang et al., 2016a). Thus, humans and machines are
considered in the Industry 4.0 concept as an integrated socio-technical
mechanism (Thoben et al., 2017). Industry 4.0 considers also remote
control of the operations activities by means of mobile devices, which
improves the decision-making processes and enhances the information
visibility of the process, two aspects that contribute for the Smart
Working as well (El Kadiri et al., 2016; Ahuett-Garza and Kurfess, 2018;
Tao et al., 2018a,b,c; Thoben et al., 2017).
Virtual tools can be also considered part of Smart Working since
they support the decision-making process. Augmented and virtual rea-
lity are two emerging technologies in this field that create partial and
complete virtual environments (Elia et al., 2016; Gilchrist, 2016). In
manufacturing maintenance, virtual reality accelerates workers train-
ings with an immersive simulation of the maintenance routines
(Gorecky et al., 2017; Turner et al., 2016), while augmented reality
supports workers with an interactive and real-time guidance for the
necessary steps of the tasks to be made (Scurati et al., 2018). In product
development activities, these tools create virtual models of the product,
helping to detect flaws during the product usage without needing
physical prototypes (Tao et al., 2018a; Guo et al., 2018).
Lastly, we also included collaborative robots in the Smart Working
dimension. This is because collaborative robots are specifically
Table 2
Smart Product technologies.
Categories Technologies for Smart
Products
Reference
Capabilities of Smart,
connected products
Product's connectivity Porter and Heppelmann
(2014)
Product's monitoring
Product's control
Product's optimization
Product's autonomy
Table 3
Smart Supply Chain and Smart Working technologies.
Technologies for Smart Supply Chain References
Digital platforms with suppliers (Pfohl et al., 2017; Angeles, 2009;
Simchi-Levi et al., 2004)
Digital platforms with customers
Digital platforms with other company
units
Technologies for Smart Working References
Remote monitoring of production (Wang et al., 2016a; El Kadiri et al.,
2016; Zhong et al., 2017)
Remote operation of production
Augmented reality for maintenance (Elia et al., 2016; Scurati et al., 2018)
Virtual reality for workers training (Elia et al., 2016; Gorecky et al.,
2017)
Augmented and virtual reality for
product development
(Elia et al., 2016; Tao et al., 2018b)
Collaborative robots (Du et al., 2012; Wang et al., 2015)
18

designed for the interaction with humans and to support workers ac-
tivities. In this way, manufacturing work is improved with the accuracy,
reliability and efficiency of robots, without losing the flexibility of
human work (Du et al., 2012; Wang et al., 2015). In this sense, the aim
is to reduce low added value tasks of workers by the use of collaborative
robots and taking advantage of workers potential for more advanced
tasks in which robots are limited due to the flexibility of the tasks.
Therefore, considering that, as we explained above, both technolo-
gies – Smart Supply Chain and Smart Working – provide support for
different needs of the Industry 4.0 production system, one focused on
the connection of the manufacturing system with the supply chain and
the other focused on integrating the worker with the manufacturing
system, we propose the following hypothesis:
H3. Manufacturing companies that are strongly engaged in Smart
Supply Chain (H3a) and Smart Working (H3b) technologies will also
show high maturity in Smart Manufacturing technologies.
3.2. Industry 4.0 base technologies
We consider a second layer of Industry 4.0 technologies, which we
called “base technologies” since they support all the other ‘Smart’ di-
mensions discussed above. The base technologies are composed by the
so-called new ICT (Table 4), which includes Internet of Things (IoT),
cloud services, big data and analytics (Tao et al., 2018a; Thoben et al.,
2017; Wang et al., 2016a). These technologies are considered base
because they are present in all the dimensions and in different tech-
nologies of such dimensions. They leverage the Industry 4.0 dimensions
and make the interconnectivity possible as well as they provide the
intelligence of the new manufacturing systems.
IoT represents the integration of sensors and computing in an in-
ternet environment through wireless communication (Tao et al.,
2018c). Recent advancements in the internet successfully allowed the
communication of several objects, achieving this concept. This was also
supported by the cost-reduction of sensors in the recent years (Schuh
et al., 2017), which enabled the sensing of any kind of object and their
connection to a broader network (Boyes et al., 2018).
Cloud services enable on-demand network access to a shared pool of
computing resources (Mell and Grance, 2009). This technology has the
capacity to store data in an internet server provider which can be easily
retrieved through remote access (Yu et al., 2015). Therefore, Cloud
services facilitate the integration of different devices, since they do not
need to be physically near and even though they can share information
and coordinate activities (Yu et al., 2015; Thoben et al., 2017).
The combination of using IoT and Cloud permits different equip-
ment to be connected, collecting huge amount of data, which results in
the Big Data storage (Lu, 2017; Liu, 2013). Big data consists in the data
gathering from systems and objects, such as sensor readings (Porter and
Heppelmann, 2015). Together with analytics – e.g. data mining and
machine learning, it is considered one of the most important drivers of
the fourth industrial revolution and a key source of competitive ad-
vantage for the future (Tao et al., 2018a; Porter and Heppelmann, 2015;
Ahuett-Garza and Kurfess, 2018). The main importance is due to the
information it can generate. Big data is necessary to generate the digital
twins of the factory and, subsequently, analytics enables advanced
predictive capacity, identifying events that can affect production before
it happens (Schuh et al., 2017). The combination of big data with
analytics can support the self-organization of the production lines and
can optimize decision-making activities in every dimension of an in-
dustrial business (Wang et al., 2016a; Babiceanu and Seker, 2016;
Wamba et al., 2015).
The four technologies aforementioned – IoT, cloud, big data and
analytics – have different capabilities. IoT aims to solve communication
issues among all objects and systems in a factory, while cloud services
provide easy access to information and services. Lastly, big data and
analytics are considered key enablers to advanced applications of
Industry 4.0, since the intelligence of the system depends on the large
amount of data accumulated (big data) and the capacity of analyzing
with advanced techniques (analytics). Thus, focusing on the central
element of Industry 4.0, we formulate our fourth and last hypothesis:
H4. The more advanced the company is in the Smart Manufacturing
technologies of Industry 4.0, the stronger the presence of the base
technologies will be.
4. Research method
4.1. Sampling
We performed a cross-sectional survey in manufacturing companies.
We obtained our sample from the southern regional office of the
Brazilian Machinery and Equipment Builders' Association (ABIMAQ-
Sul). This association was chosen due to its current engagement in in-
dustrial policies and strategies to promote the Industry 4.0 concept,
which shows a growing interest by the associate companies. We also
choose this association for representing one of the strongest manu-
facturing sectors in this country. The sample is composed by 143
companies associated to ABIMAQ-Sul. The questionnaire was addressed
to the Chief Executive Officers or Operations Directors of the compa-
nies. Two follow-ups were sent each after two weeks from the last one.
We obtained a total of 92 complete questionnaires for the variables
studied in this paper, representing a response rate of 64.33%. This high
response rate is due to the way the questionnaire was administrated,
since ABIMAQ-Sul office contacted all companies to inform about the
survey, as well as it presented this research in the association's in-
dustrial seminars and sent the questionnaires by an institutional e-mail,
following the collection process. Table 5 shows the composition of the
Table 4
Base technologies for Industry 4.0
Base technologies References
Internet of Things (IoT) (Wang et al., 2016a; Lu, 2017; Zhong et al., 2017;
Gilchrist, 2016)
Cloud computing
Big data
Analytics
Table 5
Demographic characteristics of the sample.
Category Description (%) Category Description (%)
Main industries
attended by the
manufacturing
companies of
the sample
Agriculture 48% Company's
size
Small
(< 100
employees)
41%
Biotechnology 1%
Chemicals 24% Medium
(100–500
employees)
37%
Construction 10%
Energy 15% Large
(> 500
employees)
22%
Food products 29%
Leather and
related
products
3% Respondent's
profile
Managers
or directors
78%
Mining 21% Supervisors 10%
Furniture 10%
Pharmaceutical 10% Analysts 4%
Pulp and paper 16%
Software and
technology
17% Other 8%
Steelworks 18%
Transport 13%
Metal products 34%
Other
manufacturing
24%
19

sample regarding companies' size, respondents' profile and main mar-
kets attended by the companies of the sample.
4.2. Variables definition
Following our conceptual framework represented in Fig. 1, we de-
veloped a questionnaire to assess both the front-end and base tech-
nologies of Industry 4.0 (Tables 1–4). The questionnaire assessed the
existence or not of a type of technology and the level of implementation
of such technology in the manufacturing companies. We used a five-
point Likert scale varying from 1 – Very low implemented to 5- Ad-
vanced implemented. Thus, the highest degree shows an advanced
maturity of this technology. Since we aimed to classify companies re-
garding their implementation patterns of the Industry 4.0 concept, we
also included in the questionnaire companies’ information that may
help us to better understand their profile. These characteristics were
already presented in the demographic description shown in Table 5.
Before implementing the questionnaire, we refined the description
of the technologies as well as its structure with a round of interviews
with 15 scholars and seven practitioners. Scholars are affiliates to
technological institutes of Southern Brazil dedicated to the develop of
innovative solutions based on IoT technologies. Industry re-
presentatives are companies’ CEOs that compose the directory board
from ABIMAQ-Sul. They helped to align the questionnaire to the tech-
nical language of the companies.
4.3. Sample and method variance
We tested potential sample bias using Levene's test for equality of
variances and t-test for the equality of means between early and late
respondents. Aiming this, we grouped respondents into two main
waves, the early respondents, i.e. those from the first e-mail (63 an-
swers), and the late respondents, i.e. the remaining 29 answers. The
tests indicated that only 2 of the 45 variables (technologies) showed
statistical differences between both groups but only at p < 0.01, while
there were no differences in any variable for p < 0.05. Following
(Armstrong and Overton, 1977), we concluded that there are no evi-
dences of differences of these groups compared to the population.
Regarding the common method variance (Podsakoff et al., 2003),
we randomized the technologies list order to avoid that the respondent
may directly associate technologies of the list. Furthermore, we sent our
questionnaire to key respondents (CEO and Operations Directors), as
explained in the sampling section (4.1.), in order to obtain a broader
vision of the implementation level of the Industry 4.0 concepts in the
companies. Finally, we calculated the Harman's single-factor test with
an exploratory factor analysis to address common method bias, i.e. the
variance due to the measurement method rather than to the measures
they are assumed to represent (Podsakoff et al., 2003). This test with all
variables resulted into a first factor that comprehended only 33% of the
observed variance and that, therefore, there is no single factor ac-
counting for the majority of the variance in the model. Nonetheless, to
be completely sure of the absence of this potential problem, a multiple-
respondent approach representing each company should be used, which
was no possible in our survey, being a limitation of our study (Guide
and Ketokivi, 2015).
4.4. Data analysis
The first step of data analysis was to identify companies with dif-
ferent maturity levels in the adoption of Smart Manufacturing tech-
nologies. At least two groups with distinct technological level were
necessary to test our hypotheses, in order to discover different patterns
between these groups that can explain Industry 4.0 adoption.
Therefore, we followed a two-step cluster analysis for the identification
of distinct groups with similar technological characteristics in the
sample, as previously done by other studies (Marodin et al., 2016;
Montoya et al., 2009). We clustered groups according to their similarity
of adoption of Smart Manufacturing technologies, since our theoretical
premise is that this is the central dimension of Industry 4.0. Following
Milligan and Cooper (1985), we firstly performed a hierarchical cluster
analysis (HCA), which determines the adequate number of groups for
sample division. HCA was performed using Ward's method in the
clustering process, with the Euclidean distance measure of similarity
among respondents. The second stage considered the refinement of the
cluster solution and the definition of variables that discriminated the
clusters obtained. This was performed using a non-hierarchical K-means
cluster algorithm (HAIR et al., 2009).
After obtaining the cluster compositions, we performed a demo-
graphic analysis of the cluster members. The aim of this step was to
understand if the groups formed with cluster analysis presented dif-
ferent patterns of high implementation of the Smart Manufacturing
technologies of Industry 4.0 (H1). We also used the demographic ana-
lysis and independence tests to understand the relationship of these
groups of companies allocated in the different clusters with levels of
Smart Products development (H2), Smart Working and Smart Supply
Chain adoption (H3a and 3b) and of base technologies (H4). We used
Pearson's Chi-squared standardized measure of association, which is
used to reject the null hypothesis that there is no association between
the variables. In a contingency table, Pearson's Chi-squared compares
the frequencies of expected values of a variable with its current values.
A higher value of association means that for the category in analysis
(column), the variables (row) have a different value than the expected
(Ross, 2010). In our analysis, the rejection of the null hypothesis sup-
ports our formulated hypothesis, indicating a different pattern of
technology adoption between the clustered groups. According to HAIR
et al. (2009), this measure is suitable for samples larger than 50 cases,
with a minimum of five observations for each class. Therefore, we used
the Fisher's exact test for the associations resulting in less than five
observations (Cortimiglia et al., 2016).
5. Results
5.1. Results for the front-end technologies of Industry 4.0
Fig. 2 shows the dendrogram of the performed hierarchical cluster
analysis using the Smart Manufacturing technologies (Table 1) as se-
lection variables. The dendrogram represents the similarities between
companies based on the adoption profile of these Smart Manufacturing
technologies (Fig. 1). The results show that companies can be grouped
into two or three main clusters. We choose to work with three groups to
obtain more differentiation of Industry 4.0 patterns. We avoided to
select more refined number of groups since this would lead to some
clusters with little representativeness due to the low number of com-
panies in them.
After we defined the number of clusters, we performed the K-means
analysis to refine the cluster memberships. Table 6 shows the con-
tribution of each of the Smart Manufacturing technologies for the de-
finition of the clusters’ composition. The average for the level of
adoption of Smart Manufacturing technologies is statistically different
among the three groups for all technologies except for flexible lines (see
ANOVA F-values). The first cluster is characterized by technologies
below the moderate level of adoption (≤3.00); the second is
Fig. 2. Dendrogram for the selection of the number of clusters.
20

characterized by higher levels of adoptions than the first group, but
with mean values below the high level of implementation (≤4.00).
Finally, the last group has the highest level of implementation of all the
technologies and it has a subset of technologies with high level of im-
plementation (≥4.0) while the other technologies are above the middle
level of implementation (≥3.00). Therefore, we defined these three
groups as low adopters (Cluster 1), moderate adopters (Cluster 2) and
advanced adopters (Cluster 3), respectively, of the Industry 4.0 Smart
Manufacturing technologies. Regarding the size of the companies con-
stituting each of these clusters, it is worth noticing that the more ad-
vanced the cluster is in terms of technology adoption, the greater the
concentration of large companies composing it.
The findings presented in the K-means results of Table 6 support H1.
These findings show that the clusters (adoption pattern) are divided
according to levels of implementation of the complete set of technolo-
gies. In other words, one could expect that some cluster may group
companies with high implementation of one type of technologies while
other clusters may group companies with high implementation of other
type of technologies, but this did not happen. What the results show, as
proposed in hypothesis H1, is that companies are clustered in a pro-
gressive implementation of the complete set of technologies, showing a
strong interrelation among them, except for flexible lines which did not
show statistical differences between groups. Therefore, as suggested in
H1, the Smart Manufacturing technologies are complementary and not
substitutable while companies are growing in maturity. Additionally,
Table 6 presents three categories of technologies independently of the
cluster analyzed. This can be seen in the classification presented in grey
scale. The first category, represented with light grey color, is composed
by technologies with the highest level of implementation in any cluster.
This set of technologies considers those related to vertical integration:
Sensors/PLCs + SCADA + MES + ERP systems, and those associated
with energy efficiency and traceability. The second category of tech-
nologies – highlighted with moderate grey color – is composed by
technologies focused on virtualization of the factory and automation.
Finally, the cluster highlighted in dark grey color is represented by the
less implemented technologies in the clusters.
In the second step, we associated the three clusters of maturity-le-
vels with the adoption of different types of solutions for Smart Products,
something part of the broader Industry 4.0 concept, as proposed in our
hypothesis H2. These results are reported in Table 7 in which it can be
seen that H2 is supported. The results show that Cluster 3, which is
composed by companies with advance adoption of Smart
Table 6
K-means results for cluster variables.
Smart Manufacturing technologies (H1) a
Cluster Mean + S.D. ANOVA
F-value
Cluster 1
Low adopters
Cluster 2
Moderate adopters
Cluster 3
Advanced adopters
Sensors, actuators and PLCs 2.36 ± 1.22 3.55 ± 1.00 4.60 ± 0.63 27.89***
Enterprise Resource Planning (ERP) 3.20 ± 1.15 4.06 ± 1.00 4.53 ± 1.06 10.80***
Manufacturing Execution System (MES) 2.14 ± 0.90 3.39 ± 1.00 4.33 ± 0.72 38.48***
Supervisory Control and Data Acquisition (SCADA) 2.32 ± 0.98 3.21 ± 1.02 4.07 ± 1.10 18.61***
Energy efficiency monitoring system 1.75 ± 0.65 2.15 ± 0.76 4.07 ± 0.96 54.72***
Energy efficiency improving system 1.77 ± 0.60 2.15 ± 0.83 4.07 ± 0.96 52.23***
Identification and traceability of final products 2.32 ± 0.96 3.64 ± 1.19 4.00 ± 0.76 23.12***
Identification and traceability of raw materials 2.18 ± 0.97 3.52 ± 1.20 4.00 ± 0.65 25.43***
Simulation of processes (digital manufacturing) 2.20 ± 0.85 2.73 ± 1.13 4.00 ± 0.93 19.22***
Machine-to-machine communication 1.80 ± 0.73 2.79 ± 0.99 3.93 ± 0.70 40.01***
Industrial robots 1.80 ± 0.82 2.94 ± 1.30 3.80 ± 1.21 23.00***
Artificial Intelligence for production 1.77 ± 0.60 2.70 ± 0.85 3.40 ± 1.06 28.79***
Virtual commissioning 1.73 ± 0.66 2.39 ± 0.97 3.33 ± 1.29 18.72***
Artificial Intelligence for predictive maintenance 1.68 ± 0.74 2.42 ± 0.94 3.33 ± 1.23 19.95***
Automatic nonconformities identification 1.95 ± 0.61 2.55 ± 0.83 3.27 ± 1.10 16.70***
Additive manufacturing 1.80 ± 0.67 2.48 ± 1.18 2.60 ± 1.24 6.39**
Flexible lines 2.00 ± 0.89 2.45 ± 1.23 2.53 ± 1.36 2.19
Number of companies 44 33 15
Small size companies 63.6% 21.2% 6.7%
Medium size companies 22.7% 54.5% 20.0%
Large size companies 13.6% 24.2% 63.3%;;
** p < 0.05; ***p < 0.001.
a
Note: the grey scale represents levels of adoption of the considered technologies in each cluster, varying from high adoption (light grey) to low adoption (dark
grey).
Table 7
Levels of adoption of Smart Products technologies.
Smart Product technologies (H2) Adoption Cluster 1
Low adopters
Cluster 2
Moderate adopters
Cluster 3
Advanced adopters
Test
Smart products with connectivity capability Yes 14% 36% 73% Fisher's test = 18.40***
No 86% 64% 27%
Smart products with monitoring capability Yes 20% 45% 67% Pearson's Χ2
test = 1.84**
No 80% 55% 33%
Smart products with control capability Yes 23% 39% 67% Pearson's Χ2
test = 9.66**
No 77% 61% 33%
Smart products with optimization capability Yes 7% 18% 53% Fisher's test = 3.86**
No 93% 82% 47%
Smart products with autonomy capability Yes 7% 6% 53% Fisher's test = 16.69***
No 93% 94% 47%
Total count 44 33 15
** p = 0.05; *** p = 0.001.
21

Manufacturing, is the only one with high adoption of three capabilities
for Smart Products: connectivity (73%), monitoring (67%) and control
(67%). Thus, our findings show that there is a connection, at least at the
advanced level of Industry 4.0 (Cluster 3), between the adoption of
Smart Manufacturing and Smart Product technologies. On the other
hand, optimization and autonomy are capabilities less implemented at
the advanced level (47% of the companies of Cluster 3 did not adopt
this capabilities), although they show a higher number of companies
adopting them if compared to the other two clusters.
In the next step, we tested hypotheses H3a and H3b. The results are
presented in Table 8, showing that H3a and H3b are partially supported
by our findings. Firstly, regarding Smart Supply Chain technologies of
Industry 4.0 (H3a), it is possible to see that the three types of platforms
for integration with suppliers, customers and other units of the com-
pany show low levels of adoption in the three clusters. It is worth no-
ticing that digital platforms for suppliers and customers’ integration,
which represent the horizontal integration of the Industry 4.0 concept,
are very low adopted, even in companies with advanced level of im-
plementation of Smart Manufacturing. Only platforms for the integra-
tion with other units showed a relatively high level of adoption (53%)
in the advanced adopters of the Smart Manufacturing technologies
(Cluster 3).
Table 8
Levels of adoption of Smart Supply Chain and Smart Working technologies.
Support Technologies Adoption Cluster 1 Cluster 2 Cluster 3 Fisher's exact test
Low adopters Moderate adopters Advanced adopters
Smart Supply Chain technologies (H3a) Digital platforms with Suppliers Yes 7% 9% 33% 6.38**
No 93% 91% 67%
Digital platforms with customers Yes 5% 9% 33% 7.81**
No 95% 91% 67%
Digital platforms with other company units Yes 9% 21% 53% 11.91**
No 91% 79% 47%
Smart Working technologies (H3b) Remote monitoring of production Yes 9% 39% 93% 37.17***
No 91% 61% 7%
Collaborative robots Yes 2% 9% 67% 28.30***
No 98% 91% 33%
Remote operation of production Yes 5% 3% 40% 12.95***
No 95% 97% 60%
Augmented reality for maintenance Yes 0% 6% 27% 10.24***
No 100% 94% 73%
Virtual reality for workers training Yes 0% 6% 27% 10.24***
No 100% 94% 73%
Augmented and Virtual reality for NPD Yes 2% 6% 33% 10.31***
No 98% 94% 67%
** p = 0.05; *** p = 0.001.
Fig. 3. Framework summarizing the findings of the adoption patterns of Industry 4.0.
22

Regarding the Smart Working technologies (H3b) (Table 8), we also
found only partial support for hypothesis H3b. In this case, only the use
of remote monitoring of production and the use of collaborative robots
presented a relatively higher level of adoption (93% and 67% of the
companies) among the advanced adopters of Smart Manufacturing
technologies. Remote operation of production showed a slightly higher
level of adoption in Cluster 3 (40% of the companies) but the lack of
adoption of this technology is still predominant in this cluster (60% of
the companies). The less implemented technologies for Smart Working
in the three clusters were augmented reality and virtual reality.
5.2. Results for the base technologies of Industry 4.0
In the final step, we analyzed how the base technologies are present
in the implementation of the Smart Manufacturing technologies of
Industry 4.0, as proposed in hypothesis H4. Our findings support H4
since the four base technologies are more adopted in Cluster 3 (ad-
vanced adopters of Smart Manufacturing). It is also possible to see that
Cloud services is the adopted base technology in all clusters, being the
most accessible solution used by the companies. On the other hand,
Internet of Things, Big Data and Analytics follow a similar patter with
low levels of adoption in Clusters 1 and 2.
6. Discussions
We summarized our findings in the framework of Fig. 3 to illustrate
a holistic vision of the adoption patterns of Industry 4.0 technologies.
The framework summarizes the results presented in Tables 6–9. We
divided the structure following our initial conceptual framework of
Fig. 1, which we expanded with the empirical findings. We also divided
the implementation complexity based on the results from the three
clusters, showing those more implemented (light grey color) to those
less implemented (dark grey color) technologies. We represented these
intensities as a growing complexity when implementing a sequence of
stages. It is worth noticing that we are not proposing them as the ideal
stages of implementation, but just the current situation of the compa-
nies studied. This framework can be compared with other prior pro-
posals from the literature, such as Schuh et al. (2017), Lee et al. (2015)
and Lu and Weng (2018). The main difference between these models
and our framework is that they proposed ideal stages while ours present
what is happening in an industrial sector based on empirical evidences.
We also detail the technologies, while they focused mainly on cap-
abilities required for Industry 4.0. Moreover, our model is broader,
since it considers not only the internal Smart Manufacturing technol-
ogies as the other models does, but we also include many other im-
portant dimensions and technologies. We use this framework to guide
the discussions below.
Our findings allowed us to verify some prior suggestions of the lit-
erature. One of them is that the level of implementation of the Industry
4.0 concept is dependent of the companies' size, as suggested by
Kagermann et al. (2013) and Schuh et al. (2017). Our results (Table 6)
show a relationship between large companies and advanced im-
plementation of Industry 4.0. This is aligned with the general innova-
tion literature, which affirms that large companies are more prone to
invest in process and product innovation, since it requires high in-
vestments in technological infrastructure, something not viable for
small companies (Frank et al., 2016). Moreover, these findings showed
that advanced adopters are leading all the technologies and not some
specific, which may indicate that the growing maturity in Industry 4.0
technologies implies in aggregating technological solutions as a ‘Lego’
instead of substituting one to another. This is represented in our fra-
mework (Fig. 3) as the progressive adding of technologies in the
growing maturity of Industry 4.0.
Additionally, a surprising result from our findings regarding Smart
Manufacturing adoption is that flexible lines is the only technology
which was not strongly adopted in any of the three maturity clusters.
This is in line with previous findings from Dalenogare et al. (2018) at
the industry level. Flexible line has been proposed as one of the Industry
4.0 concepts, which can be also supported by the use of additive
manufacturing to produce different components and products in the
same line (Wang et al., 2016b; Weller et al., 2015; D'Aveni, 2015).
However, previous studies on Industry 4.0 in emerging countries
highlighted productivity the main industrial concern instead of flex-
ibility (CNI, 2016). Since we studied an industrial sample focused on
business-to-business solutions in which customization of the products
might require more flexibility and adaptation of the plants, instead of
large-scale production, we were expecting different results. Therefore,
one of our concerns is that companies are just replicating an adoption
pattern of Industry 4.0 from other business context focused on econo-
mies of scale and, consequently, on productivity. Other possibility is
that companies see this as a very advanced level of implementation,
being at the top of the maturity, as we show in the framework of Fig. 3.
For example, making an existing production line more flexible will
require not only to apply new technology but to change the layout and
production methods. This might be financially restrictive or might re-
quire too many rearrangements that interrupt the operations routines.
Thus, the role of flexible lines in Industry 4.0 require mores in-
vestigation in future research.
Regarding the connection between Smart Manufacturing and Smart
Products, (tested in hypothesis H2), the extant literature suggests that
Industry 4.0 can foster the implementation of digital solutions focused
on the customer (Ardolino et al. 2018; Kamp et al., 2017; Opresnik and
Taisch, 2015), stimulating the offering of Smart Products (Lerch and
Gotsch, 2015). We could evidence such relationship in our results from
Table 7, since the high adopters of the Smart Manufacturing concept are
the same with strong implementation of some of the Smart Product
capabilities. In this sense, we reinforce prior works of Kamp et al.
(2017) and Rymaszewska et al. (2017) that highlighted potential re-
turns of the digital Smart Products for the internal manufacturing
processes of the company. However, the companies of our sample are
only implementing what we called as ‘passive' Smart products, which
help to monitor and control, but not to optimize and to provide
Table 9
Levels of adoption of base technologies.
Base technologies (H4) Adoption Cluster 1
Low adopters
Cluster 2
Moderate adopters
Cluster 3
Advanced Adopters
Test
Internet of Things Yes 18% 39% 67% Pearson's Χ2
test = 12.51**
No 82% 61% 33%
Cloud Yes 43% 58% 60% Pearson's Χ2
test = 2.13
No 57% 42% 40%
Big Data Yes 9% 27% 60% Fisher's test = 15.20***
No 91% 73% 40%
Analytics Yes 18% 36% 60% Pearson's Χ2
test = 9.62**
No 82% 64% 40%
** p = 0.05; *** p = 0.001.
23

autonomy to the machines.
Our results showed partial evidence to the hypotheses H3a and H3b.
The literature has highlighted the supply chain integration as one of the
advantages of Industry 4.0 based on integrated platforms with suppliers
(Pfohl et al., 2017; Angeles, 2009; Simchi-Levi et al., 2004). Our results
show that, at least in the industrial sector considered in our sample,
supply chain integration is still in the initial stages of development. The
same limitation was found in the technologies for Smart Working ac-
tivities, where only remote monitoring of production and collaborative
robots were prominent among the advanced adopters of the Smart
Manufacturing technologies. In this case, augmented and virtual reality
are still low implemented. The same was reported in other studies that
consider them still initial technologies (Elia et al., 2016). Therefore, we
could state that these two dimensions might only grow after the con-
solidation of the internal Smart manufacturing dimension of Industry
4.0.
Regarding the base technologies, some interesting and counter-
intuitive results were found. Firstly, one could expect that cloud may be
dependent of the implementation of IoT solutions, since the equipment
should be first connected to generate data stored in the cloud (Wang
et al., 2016a). However, the fact that cloud services is the first im-
plemented technology may suggest that it is used not as a way to store
real-time data from the equipment but simply used as a remote data
storage. In this sense, cloud may represent only a remote storing of
data, while the real-time data collection may be represented by the
sequence of IoT + Big Data + Analytics, which are the following
technologies in the framework of Fig. 3. As previously demonstrated by
Dalenogare et al. (2018) at the industry-level, this is a set of technol-
ogies still very immature in traditional manufacturing sectors as the one
considered in our sample. This is also aligned with Enrique et al. (2018)
who showed that, in general, companies in Brazil need to grow in the
use of ICT, as those considered here.
7. Conclusions
In this paper, we aimed to identify different patterns of adoption of
two technology layers of Industry 4.0: base technologies and front-end
technologies. Our results support our premise that Smart Manufacturing
has a central role in Industry 4.0 and that it is connected with Smart
Products, being strong interrelated. We also showed how other front-
end technologies complement Smart Manufacturing, but they are still
low implemented in the sample studied.
According to our findings, companies with an advanced level of
implementation of Industry 4.0 tend to adopt most of the front-end
technologies and not a specific subset. For the technologies adopted, a
sequence of implementation steps can be drawn. We summarized this in
a framework, which is the main contribution of our findings, showing
how Industry 4.0 technologies are implemented and interrelated.
7.1. Practical implications
Our results can contribute for companies that look for technological
upgrade. We provided insights about requirements for the im-
plementation of Industry 4.0 technologies. This is important for man-
agers since there is still considerable uncertainty about Industry 4.0,
especially regarding technology requirements and potential benefits, as
previous researches have shown (CNI, 2016; Dalenogare et al., 2018).
Managers can use our framework to focus not only on the front-end
technologies, but also on the base technologies that provide support for
the implementation of Industry 4.0. Managers can also use our frame-
work as a maturity implementation model to evolve in the Industry 4.0
concept. The framework shows levels of implementation of several
technologies which were related to complexity levels for the im-
plementation of the Industry 4.0 concept. Our findings suggest that
companies should not stay only at the first stage described in our fra-
mework, focusing only on vertical integration, energy management and
traceability. These are the most consolidated technologies of Industry
4.0. As shown in our results, advanced automation, virtualization and
flexibilization are the frontiers regarding the complexity of im-
plementation of Industry 4.0. Companies that master these higher levels
of maturity can gain competitive advantage. These are stages where big
data and analytics play a key-role, supporting tools such as artificial
intelligence for operational aspects of the factory and for increasing
workers productivity through augmented and virtual reality. We also
showed also that even flexible lines are something aimed by the In-
dustry 4.0 concept, it can be hard to be achieved due to the already
established manufacturing arrangements. Therefore, managers who are
starting new factories should think on this aspect before defining the
manufacturing layout, so that this may not be a future restriction in the
implementation of Industry 4.0.
7.2. Limitations and future research
This research has some limitations that open new avenues for future
research. Firstly, our work considers a sample from a specific industrial
sector which has its own characteristics. The machinery and equipment
industry is intrinsically focused on business-to-business (B2B) activities,
which are very different from business-to-consumer (B2C) models. B2B
activities demand more specialized and customized solutions, resulting
in stronger interaction and connection between the company and the
customer. This naturally affects the relevance given to the different
dimensions of the front-end technologies. Moreover, almost half of our
sample has the agriculture sector as the main industrial market. This
sector has grown very fast in the demand of IoT solutions for automated
agriculture (e.g. European Commission, 2017; Porter and Heppelmann,
2014) and this opened more opportunities for Industry 4.0. These
characteristics cannot be simply extrapolated to other kind of markets,
especially those based on B2C activities. Another important character-
istic of our sample is that we are considering a traditional manu-
facturing sector, which is positioned as a middle level of maturity in the
digital transformation process, behind other more advanced sectors
such as computers and electronics (CNI, 2016). Therefore, one should
be careful to accept our findings as a general pattern for Industry 4.0
technologies. Nonetheless, the comparison made with prior works re-
garding the maturity levels of Industry 4.0 shown in our findings (e.g.
Schuh et al., 2017; Lee et al., 2015; Lu and Weng, 2018; Dalenogare
et al., 2018) makes us believe that our findings could be extended to
other industrial fields. However, more empirical evidences are needed
to validate this possible extension to other industries. Second, our study
did not consider the effect of these technologies on industrial perfor-
mance, which could be a very interesting issue for future research. The
real benefit of Industry 4.0 is still a concern for practitioners and such a
study could be helpful for theory and practice. Dalenogare et al. (2018)
have recently studied such an impact but only at the industry-level, and
they called the attention to the need of firm-level analysis. We moved
our research a first step towards this direction, since we provided an
empirical base for the understanding of how technologies are adopted
and how they relate to each other. From this starting point, future re-
search can advance in studying how these technologies impact on in-
dustrial performance at the firm level. Lastly, we demonstrated that
large companies are more prepared for Industry 4.0, as expected.
However, the higher maturity group also presented some small size
companies that successfully adopted smart manufacturing technologies.
Future research could deep in this kind of companies to understand
what factors support them to innovate, since the literature indicates
many barriers that small companies face in the digital transformation
(e.g. Kagermann et al., 2013; Müller et al., 2018).
Acknowledgments
The authors thank the Brazilian National Council for Scientific and
Technological Development (CNPq – Conselho Nacional de
24

Desenvolvimento Científico e Tecnológico) (Process n. 305844/2015-
6), the Research Council of the State of Rio Grande do Sul (FAPERGS,
Fundação de Amparo à Pesquisa do Estado do Rio Grande do Sul)
(Process n. 17/2551-0001) and the Research Coordination of the
Brazilian Ministry of Education (CAPES), for the financial support re-
ceived to conduct this research.
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Alejandro Germán Frank, Ph.D. is an Associate Professor of Industrial Organization at
the Department of Industrial Engineering of the Federal University of Rio Grande do Sul
(UFRGS) – Brazil, and the director of the Organizational Engineering Group (NEO –
Núcleo de Engenharia Organizacional) also at UFRGS. He has been a visiting scholar at
the Industrial Performance Center of the Massachusetts Institute of Technology (USA) and
at the Observatory of ICT & Management of Politecnico di Milano (Italy). His main re-
search interests include strategic and operations management, industrial organization,
industrial performance, servitization and new product development.
Néstor Fabián Ayala, Ph.D. an Associate Professor of Service Engineering at the Federal
University of Rio Grande do Sul (UFRGS) – Brazil, and the co-director of the
Organizational Engineering Group (NEO – Núcleo de Engenharia Organizacional) also at
UFRGS. He has been a visiting scholar at the Institute Polytechnic of Grenoble (Grenoble
INP), France. His main research interests include strategic management, and operations
management with focus on servitization and Industry 4.0.
Lucas Dalenogare, is a PhD candidate at the Institute Polytechnic of Grenoble (Grenoble
INP), France. He is a research fellow of the G-SCOP laboratory at the same university and
of the Organizational Engineering Group (NEO) at the Federal University of Rio Grande
do Sul (UFRGS). He has a bachelor degree in Civil Engineering and MSc degree in
Industrial Engineering both from UFRGS. His main research is concerned with the use of
advanced technologies for Industry 4.0.
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